The GBP to USD exchange rate elevated on Friday’s trading session as British retail sales grew more robust than expected.
The Pound sterling rose 0.07% to 1.36, following a gain of 0.23% yesterday.
Accordingly, retail sales volumes edged up by 1.90% month-on-month in January. This data significantly outpaced the market estimate of 1.00% and the last drop of 4.00%.
Remarkably, it is the most significant rise since the lockdown rules affected non-essential stores in England last April.
Then, the sales volumes also increased by 9.10% from a year earlier, surpassing the consensus of 8.70%.
It also bounced up from the prior drop of 1.70%, indicating resiliency amid the COVID-19 pandemic.
Economists explained that this solid recovery indicated that the Omicron-induced hit to activity was smaller than previously thought.
Still, Retailers grappled with the rapidly surging inflation. The consumer price index (CPI) posted at 5.50% last month, the highest record in nearly 30 years.
Additionally, the Bank of England forecasted the inflation to peak above 7.00% in April.
In the stated case, traders widely expected the BOE to tighten its monetary policy further. These bets also supported the strength of the GBP to USD exchange rate.
The British currency gained pace from the US dollar despite the rising geopolitical tensions between Ukraine and Russia.
Recently, the United States accused the Russian government of preparing a pretext to justify a possible attack, spreading market jitters.
Fears receded after the American State Department agreed to talk with the Russian Foreign Minister next week over the Ukraine crisis.
EUR to GBP Exchange Rate Jumps
Meanwhile, the EUR to GBP exchange rate jumped 0.02% to 0.83 on the improving market sentiment. At the same time, the EUR to USD exchange rate inched up 0.08% to 1.14.
Nevertheless, the GBP to JPY exchange rate climbed 0.30% to 156.93.
Unlike the GBP to USD exchange rate, the Japanese yen plummeted 0.20% to 115.16 against the greenback.
Similarly, the USD to CHF exchange rate strengthened 0.03% to 0.92 as safe-haven currencies weakened.
Conversely, the risk-sensitive AUD to USD exchange rate enhanced 0.46% to 0.72.
Furthermore, the US dollar index decreased 0.03% to 95.77, slipping from its 0.10% Friday upturn.
Subsequently, the debate continues about how aggressive the Federal Reserve will be this year.
